uncertainty by ratings agencies. “There was an expectation in the
marketplace that there would be a small resurgence of CMBS
deals, but when they came out to market, the reception was not
sufficient to make them happen,” Brodwin says.
In fact, things have gone downhill for the CMBS market since the
third quarter. Spencer G. Levy, executive managing director of capital markets for CBRE, says that since the Goldman-Citi CMBS deal
was pulled in July, the securities market has become increasingly difficult. Securitized lending deal spreads have expanded, and it’s
become much more difficult to get quotes and secure rate locks.
Yet while the temporary downturn in CMBS deals impacts the
market, Brodwin stresses, “It doesn’t mean that there isn’t financ-
ing available; it just means that we are back to
where we were three, six or nine months ago.
lender after the past 30 days or so are pretty tough,” he says.
Yet Levy points out that despite the troubled environment, life
companies have not tightened financing terms of late, although
they are somewhat pickier in the types of deals they will finance.
On the CMBS side, CBRE expects a few billion dollars of CMBS
deals to hit the market in the next month or so. Levy relates that if
some institutional investors purchase the bonds on the back-end, a
ramp-up in the conduit market will take place by year’s end.
But others aren’t as bullish in their expectations. Rather, they
expect more of a gradual shift during the next several months as
more issuances are introduced, but it won’t be a rush by any mea-
sure. Brodwin maintains that unless there are some “major deal
3_right place_ 4.5x7.25.qxp:Layout 1 9/26/11 1: 10 PM Page 1
PRUDENTIAL COMMERCIAL REAL ESTATE
It’s a good
time to be
looking at
acquisitions.
Not every
deal is a
good one,
but there are a lot of
opportunities.”
THE “BE IN THE RIGHT
PLACE AT THE RIGHT
M
PRICE” CHALLENGE.
R. JOHN WILCOX
Savills
1/2 page
Island
When your business is growing
and you need a new location,
Prudential Commercial Real Estate
can help you find the most strategic,
cost-effective solution.
Our specialists provide in-depth
analysis of market data and trends
to tailor a strategy to your personal
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3C
9/22/
Job N
PCRE
Job N
right
at the
Pub: R
Issue
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1
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Money is available and the rates are still very
low, but the terms are not quite where people
would want in terms of leverage.”
Borrowers had hoped to go back to the days
when they could secure 75% to 80% leverage,
but “that doesn’t seem like that is going to be
happening anytime soon,” he says. Deals that
would have garnered 80% financing a few
years ago, would today be at 65% LTV. A trans-
action that pulled in 75%, would now bring in
about 50%, he adds.
Unlike in the first half of the year, which
was marked by a “decided shift” toward CMBS-structured deals that were more aggressive
than institutional-financed transactions and
were more diverse in property types and locations, since the S&P downgrade, life insurers
have come out of the woodwork, says R. John
Wilcox, managing director of Savills. However,
along with the increase in lending activity will
likely come changes to their underwriting
requirements. “If you had a loan or term
sheets that you received in May or June, and
you were expecting to have a fall closing, the
chances of holding that term sheet with your
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prudentialrealestate.com/commercial
or call 800-666-6634, ext. 6055 to locate a
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